"Our results exceeded expectations despite the more challenging backdrop, demonstrating the strength of our iconic brands, the agility of our operating model, and the consistent execution of our global teams. We delivered record first quarter revenue, led by International growth, and drove AUR gains in our core categories. At the same time, we continued to invest in our brands and business, while returning cash to shareholders, underscoring our confidence in the significant runway ahead over our planning horizon", commented Joanne Crevoiserat, Chief Executive Officer of Tapestry.

First Quarter Results

In the first quarter of fiscal 2023, which ended on the 1^st of October, Tapestry's net sales totalled 1.51 billion US dollars, reflecting an increase of approximately 2%, on a comparable basis to the same period of last fiscal year. Excluding a 370-basis point headwind from currency due to the appreciation of the US Dollar, revenue rose over 5% versus last year.

Coach's net sales in this period remained flat at 1.12 billion US dollars, while Kate Spade's net sales amounted to 321.9 million US dollars, up by 7%, as compared to the first quarter of fiscal 2022. Stuart Weitzman's net sales, in turn, declined by 2%, totalling 65.3 million US dollars, on a comparable basis to the same period of the prior year.

The company reported a sales growth of 11% at constant currency in international markets, including "outsized gains in Other Asia, Japan and Europe" that offset the 11% decline in Greater China due to COVID-19-related disruptions. In North America, revenue increased only slightly, as compared to the same quarter of fiscal 2023.    

Tapestry's net income totalled 195 million US dollars in the first quarter of the current fiscal year, with earnings per diluted share of 0.79 US dollars, on a comparable basis to net income of 227 million US dollars and earnings per diluted share of 0.80 US dollars in the same quarter of the previous year.

Fiscal 2023 Outlook

Tapestry updated its earnings outlook "due entirely to an estimated headwind of 0.20 US dollars based on incremental currency pressure resulting from the further strengthening of the US Dollar".

It is now anticipating reaching revenue of 6.5 billion US dollars to 6.6 billion US dollars, as compared to the previous guidance of approximately 6.9 billion US dollars. Earnings per share are expected in the range of 3.60 US dollars to 3.70 US dollars, representing a mid-single digit growth over fiscal 2022, on a comparable basis to the previous outlook of earnings per diluted share between 3.80 US dollars and 3.90 US dollars, which would represent double-digit growth over fiscal 2022.